The term production means the transformation of raw materials into products through a series of specific effects, each of which causes certain changes in the physical or chemical characteristics of the materials.
That is why during the “Agrarian” and especially during the “Industrial Age” it is necessary to use the name “Production Management”. During the “Information Age”, in parallel with the production of tangible products, the volume, and scope of services increased, in which the focus was not on the creation of physical products, but services, transport, sales, etc.
In this way, production is associated with the creation of something new product or service, which disappears after its creation. Today, “ideas” also fit into the name production, and the terms production process management, production management, and operations management are interchangeable. Studies show that production and operations management describe the same area of tasks.
Both are related to the management of the company’s resources. Production management is the planning, control, improvement of activities in organizations producing goods or services to transform or add value to available resources so that the latter gain consumer value and meet customer consumption. Production management is a factor in the realization of organizational goals and objectives. It is engaged in all organizational functions, as they all take care of the common goal – the production of the product from available resources.
The most important function of production management is the management of production systems, within which the processes of transformation of resources take place are the result. Production management is an organizational function, with clearly defined management responsibilities for creating the agreed quantities, qualities, and deadlines.
Production management is an area of management and has a separate, own managerial role, which separates it from other scientific-applied areas. The production management process covers the following main functions: planning; implementation, reporting, control, analysis, regulation.
Description and characteristics of the object of production management. To satisfy the wishes of its customers, the production organization is forced to carry out several main activities:
- Discovering potential customers, revealing their needs, and convincing them to use the product;
- Providing the product efficiently and effectively;
- Managing organizational finances to ensure continued business success.
Marketing, innovation, and production
These activities are known as marketing, innovation, manufacturing, finance. In the modern market economy, there is an increase in services provided. Many organizations achieve their goals through the production of services. Reference: Technological innovation – the creation of new or improved technology – Wikipedia Lab (wikipedia-lab.org)
Each organization is faced with the task of the most efficient way to carry out the process of transformation of resources to achieve a finished product. The essence of production management is to manage and operate efficiently and effectively production systems.
Each business organization performs a certain type of transformer process in the input resources before offering them as a final result to the client. At each stage of this transformation, a certain value is added to the new product.
This sequence of added values at process stages is known as the value chain. Every business needs to construct its value chain to its service or product. The variety of business tasks can be grouped into primary and secondary (supporting). The primary ones are those activities directly related to the physical change of the product.
These are logistics – warehousing, inventory control, transport, etc .; production – the transformation of incoming flows into a finished product; marketing and sales – stimulating the customer in choosing and buying; service – installation, maintenance, consultations, etc. The supporting activities are procurement, technical development, human resources management, organizational infrastructure.